CFPB Semi-annual Report on Consumer Complaints – Part 1

The Consumer Financial Protection Bureau (CFPB) started accepting consumer complaints in July 21, 2011. The Bureau was charged with protecting consumers against deceptive practices by the consumer financial services industry.  The first complaints were about credit cards; the next were about mortgage loans which began on December 1, 2012; and consumer loans, bank accounts and services, and private student loans were included on March 1, 2012. This Bureau shared its report on consumer complaints from July 21, 2011 to July 30, 2012.

The most common complaints by product were mortgages (43 percent), credit cards (34 percent) bank accounts and services (15 percent), student loans (4 percent), consumer loans (2 percent) and other (2 percent).  Approximately 44 percent of all complaints were submitted through the Consumer Financial Protection Bureau’s website, 11 percent via telephone calls and 45 percent by mail, email and fax.  Referrals accounted for 38 percent of all complaints.

Part 1 discusses the credit card, consumer loan, mortgage loan complaints. Part 2 will discuss student loan, bank account and service complaints and handling of the complaints.

Credit Card Complaints

Credit card complaints totaled 18,800; the following represents 67 percent of the credit card complaint categories:

Billing disputes were 14 percent of the complaints.

Annual Percentage Rate (APR) or interest rate were 10 percent of the complaints.

Identity theft, fraud or embezzlement represented 9 percent of the complaints.

Closing or cancelling accounts were 6 percent of the complaints.

Credit reporting represented 6 percent of the complaints.

Collection practices were 5 percent of the complaints.

Late fees were 4 percent of the complaints.

Credit card protection or debt protection were 4 percent of the complaints.

Collection debt disputes were 3 percent of the complaints.

Other represented 6 percent.

The billing disputes category was the most common credit card complaint.  Some consumers don’t understand the dispute process and how to notify their credit card companies of a dispute.

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Mortgage Complaints

Mortgage complaints totaled 23,800; the breakdown of complaints in this category is as follows:

Problems due to being unable to pay was 54 percent of the complaints. This included loan modification, collection, and foreclosure.

Making payments, which included loan servicing, payments, escrow accounts, was 25 percent of the complaints.

Applying for the loan, which included the application, originator, and mortgage broker, was 8 percent of the complaints.

Signing the agreement, which included the settlement process and costs, was 4 percent of the complaints.

Receiving a credit offer, which included the credit decision and underwriting, was 2 percent of the complaints.

Other complaints represented 7 percent.

The most common complaint is from those that can’t make payments and want to come to an agreement with the company on foreclosure alternatives.  The consumer is confused with the processes involved for a loan modification and refinancing.

Bank Account and Service Complaints

There were 8,100 complaints about bank accounts and service, which were mainly concerning checking and savings accounts. The breakdown was as follows:

Account opening, closing, or management was 41 percent of the complaints. This category included confusing marketing, denial, disclosure, fees, closure, interest, statements, and joint accounts.

Deposits and withdrawals was 25 percent of the complaints. This category included availability of deposits, withdrawal problems and penalties, unauthorized transactions, check cashing, payroll deposit problems, lost or missing funds, and transaction holds.

Problems caused by funds being low was 15 percent of the disputes. This included overdraft fees, late fees, bounced checks, and credit reporting.

Making or receiving payments, and sending money to others was 9 percent of the disputes.  This included problems with payments by check, card, phone or online, unauthorized or fraudulent transactions, and money/wire transfers.

Using a debit or ATM card was 5 percent of the complaints.  This category included disputed transaction, unauthorized card use, and ATM or debit card fees.

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Other represented 5 percent of the disputes.

The most common complaint involved opening, closing, or managing the account. The next was complaints relating to deposit and withdrawal issues.

Tomorrow in Part 2 I’ll cover the remaining categories and how consumers responded.

Credit Reporting Expert, John Ulzheimer, is the President of Consumer Education at SmartCredit.com, the credit blogger for Mint.com, and a Contributor for the National Foundation for Credit Counseling.  He is an expert on credit reporting, credit scoring and identity theft. Formerly of FICO, Equifax and Credit.com, John is the only recognized credit expert who actually comes from the credit industry.  Follow him on Twitter here.